Newsletter for January 18, 2022
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In This Issue
General Items
ERISA Update and Outlook for 2022
Employers have spent the last two years dealing with many challenges and disruptions, and they are now looking to move forward in 2022 against a backdrop of economic and pandemic-related uncertainty and market volatility. To help plan sponsors navigate the challenging road ahead, this short article outlines four themes those plan sponsors should be keeping a close eye on in 2022.
Source: Bdo.com
Opinion: The Real Retirement Fraud
The author writes, "A new paper rehashes (and embraces) some old beliefs, blatantly ignores the full impact of workplace savings, disregards the reality that deferrals are temporary, and kills a lot of trees in the process. The diatribe's author, perhaps because he's affiliated with a law school, perhaps because the paper (provocatively titled 'The Great American Retirement Fraud') is so long (82 pages), managed to get what amounts to a long-winded pontification published by the Social Science Research Network, a network that normally publishes research."
Source: Napa-net.org
Fiduciary and Plan Governance
Running a Plan Review Meeting
What are some tips for running a plan review meeting? One can keep a plan review meeting on track by taking the following steps outlined here.
Source: Ntsa-net.org
Guide to ERISA Individual Prohibited Transaction Exemptions
One of the distinctive features of ERISA is its prohibition of a wide range of specified transactions between a covered ERISA plan or IRA and a far-reaching group of ostensible "insiders" to those arrangements. Since 1996, the US Department of Labor granted more than 1,200 individual exemptions from the ERISA prohibited transaction rules. This guide summarizes and collects individual prohibited transaction exemptions for this period.
Source: Eversheds-sutherland.com
Bridging the Gap Between the Retirement Plan Fiduciary Committees and IT
Technology-empowered threats to the security and confidentiality of retirement plan assets and data are exploding. Current fiduciary management methods largely lack a formal interface with the information technology function and its storehouse of expertise. These two realities demand that fiduciary committees embrace their enterprises' information technology departments in a new era of collaboration.
Source: Rolandcriss.com
»» Click here for more Fiduciary and Plan Governance Material
Items of Special Interest to Service Providers
PTE 2020-02 Compliance: Avoiding Five Common Mistakes
It may be a New Year, but 2022 is going to seem very familiar to Broker-Dealers and their Registered Representatives who advise retirement plans and IRAs. They are going to be spending a lot of time working to comply with new exemptions and new ERISA rules coming from the DOL. As some of these deadlines are right around the corner, this article reviews the five common pitfalls and problems, and how to better address them in disclosures and policies and procedures.
Source: Brokerdealerlawblog.com
Retirement Plan Advisers Might Help Lessen ERISA Lawsuits by Adding Defensive Provisions
Plan sponsors can apply a trio of defensive provisions to their retirement plan documents that aim to lessen exposure to participant claims brought under ERISA, according to retirement industry experts. Many plans use a basic provision whereby participants must first exhaust whatever the plan's claims procedure is before a lawsuit can be filed. Retirement plan sponsors and advisers should consider adding to the plan limitation periods, implementing mandatory arbitration clauses, and including class action waivers and venue provisions to reduce exposure to lawsuits.
Source: Planadviser.com
Court and Legal
A District Court Weighs in on Private Equity and Hedge Funds in 401k Plans
On January 8, 2022, in a case with a long and complex procedural history dating back almost seven years, the U.S. District Court for the Northern District of California granted a motion to dismiss amended claims brought by participants in two DC plans sponsored by Intel Corporation. The plaintiffs alleged violations of ERISA because the plans offered investment choices with significant allocations to alternative investments including hedge funds, commodities, and private equity.
Source: Debevoise.com
Courts Expand on Rules Regarding the Protection of Retirement Plan Assets
Most people in the retirement plan industry know that, in general, funds in qualified ERISA plans are protected from creditors. However, recent court decisions have expanded on the protections provided in some more specific circumstances.
Source: Plansponsor.com
Several New ERISA Lawsuits Target Big Retirement Plan Sponsors
Litigation over retirement plan fees and investments is already occurring at a fast pace in 2022, with three new lawsuits filed this week against sponsors of multibillion-dollar 401ks and 403bs. Litigators this week brought class-action lawsuit claims against PPL Corp., Mass General Brigham, and Milliman.
Source: Investmentnews.com (registration may be required)
LinkedIn Employees Must Rework Proposed Class Action Lawsuit Under ERISA
In November 2021, a California federal court dismissed a suit claiming that LinkedIn Corp. kept underperforming funds in its $817 million retirement fund. The judge dismissed the proposed class action but with leave to amend and add additional facts. LinkedIn asked the court to dismiss the proposed class action in January 2021, arguing that the plan participants' dislike of the investment options did not implicate LinkedIn with any violation of federal labor law.
Source: Hallbenefitslaw.com
»» Click here for more Court and Other Legal Issues
Cyber and Plan Security
Cybersecurity Preparedness Checklist for Plan Fiduciaries
401k plans face significant cybersecurity risks for which there is no federal safety net. Service providers are very much on the front line, but plan fiduciaries need to treat cybersecurity with the same high degree of diligence that they exercise with investment decision-making and all other plan administrative matters. The key to mitigating risk is conducting a self-assessment using the Cybersecurity Preparedness Checklist for Plan Fiduciaries and building a strategy around the results of that assessment.
Source: Mcdonaldhopkins.com
»» Click here for more on Cybersecurity Issues
Compliance and Regulatory
DOL Focuses on Misuse of Plan Participant Data
It seems apparent that the DOL is concerned with the misuse of confidential participant data, in addition to the theft of plan data or assets. The DOL has focused on the practice of some service providers using participant data for nonplan purposes. This usage includes selling their own or related products and services outside the plan.
Source: Hallbenefitslaw.com
DC Retirement Plan 2022 Compliance Calendar
Retirement plan sponsors are responsible for compliance with any ongoing reporting, disclosure, and notice requirements. This 4-page Retirement Plan Compliance Calendar summarizes the major requirements that apply to DC plans for 2022. Due dates are based on a calendar year plan year and apply to plans subject to the ERISA.
Source: Usicg.com
Tick, Tock, the DC Restatement Clock Is Running Out
Chances are that if you have a 401k plan, the document is on an IRS pre-approved form. One of the "costs" of having a pre-approved plan is that it must be re-stated every six years onto an updated pre-approved document that incorporates recent changes in the law. For DC plans, such a 401k, the current restatement deadline is July 31, 2022. A restatement is generally not something that can be done in a week or two, and vendors are under a great amount of stress trying to get all of their clients restated by this looming deadline. This is why it is so important that the restatement process be started as soon as possible.
Source: Erisadc.com
IRS Issues 2022 Procedures for Letter Rulings, Determination Letters, and Other Guidance
The IRS has issued its annual update and restatement of the revenue procedures governing letter rulings, determination letters, and other guidance, including guidance about employee benefit plans. These revenue procedures supersede their 2021 counterparts and are generally effective as of their issuance date. Here are highlights for employee benefit plans.
Source: Thomsonreuters.com
»» Click here for more Compliance and Regulatory Material
Marketplace News
CAPTRUST Acquires $100 Billion Retirement Plan Consulting Firm
Fidelity's DC Business Adds $90 Billion in 2021
New Transamerica Solution Reflects Small-Market Developments
Conrad Siegel Announces Launch of Central PA 401k for Small Businesses
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